Experts: The oil market is paying a premium for "fear," causing prices to surge
Igbar Gulyev, head of the Department of Finance and Economics at the Moscow State Institute of International Relations and a Doctor of Economics, told Sputnik News that the current rise in international oil prices exceeding $90 per barrel does not reflect market fundamentals but rather a "fear premium" for potential severe supply disruptions.
Gulyev pointed out: "The sharp increase in the price of Brent crude oil above $90 per barrel is first of all a geopolitical 'risk premium,' not a reflection of new supply and demand fundamentals. ... The market is now paying not for the cost of physical oil shortages, but for the fear of possible supply disruptions."
He added that OPEC+ members involved in the Iran conflict have found it more comfortable to maintain the market within a moderate to high price range of $80 to $95 per barrel than to allow oil prices to temporarily surge to $110-120 per barrel and then crash.
Gulyev also pointed out that for global oil prices to remain above $100 per barrel in the long term, the major oil-producing countries involved in the Middle East conflict must decide to stop a significant portion of their exports.
Amid ongoing conflicts in the Middle East and a crisis triggered by the halt of shipping through the Strait of Hormuz (which carries up to 20% of global oil supplies), global oil prices have continued to rise.
Trading data shows that the price of Brent crude oil first broke through the $90 mark, then reached $94, marking the first time since September 29, 2023.
On February 28, the United States and Israel launched multiple strikes against targets inside Iran, including attacks on Tehran, causing damage and civilian casualties. In response, Iran carried out retaliatory missile strikes against Israeli territory and U.S. military targets in the Middle East.
Original: toutiao.com/article/1859110732832780/
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